Murray Goulburn offers revised all cash takeover for Warrnambool Cheese and Butter


Murray Goulburn Co-operative Co. Limited (MG) yesterday announced an improved proposal to acquire the remaining issued shares in Warrnambool Cheese and Butter Factory Holdings Limited (WCB).

Devondale milk Image credit: User: Fnarf
Devondale milk Image credit: User: Fnarf

The company is looking to purchase the remaining shares via an off-market takeover for $9.00 per share, which represents a significant improvement on their previous offer.

According to the latest media release issued by Murray Goulburn, the company’s revised offer represents compelling value for WCB shareholders and bears superior value outcome in comparison to the other competing proposals.

The company firmly believes that the deal would be beneficial for MG, WCB, as well as the shareholders, WCB suppliers, employees, the local community and the Australian dairy industry. The combination of MG and WCB would also create an Australian-owned and operated company capable of servicing global growth opportunities which would return profits to dairy farmers and their communities.

With regards to the revised proposal, MG offered $9 cash per share, which represents 100% premium over the closing price of $4.51 per WCB share on ASX on 11 September made by Bega Ltd.

The revised offer also represents 13% premium to Saputo Inc. revised $8 cash per share, and 24% premium to the implied value of Bega’s offer, based on the closing price of Bega shares on ASX on 12 November 2013.

“MG remains firmly committed to acquiring WCB. A combined MG and WCB will create a globally competitive dairy food company which will deliver many opportunities for Australian dairy farmers and their communities. WCB suppliers joining the enlarged co-operative will benefit from co-operative ownership focused on maximizing farm-gate milk prices, including being able to participate in any future changes to MG’s capital structure that may arise as a result of the review that was recently announced to MG suppliers,” said MG managing Director Gary Helou.

MG chairman Phillip Tracy said the merging of the two companies will provide unique opportunities on the international dairy markets in the long run.

According to Mr. Tracy, the combined company will keep profits in Australia and return them to local farmers under the co-operatives objectives of maximizing farm-gate returns, which would bring direct benefits to all farming communities in South-West Victoria and South Australia.